SAMA promoting financial inclusion in the Kingdom
The Saudi Arabian Monetary Authority (SAMA) is promoting financial inclusion in the Kingdom, which is one of the main goals of the Financial Sector Development Program (FSDP). The program seeks to help people and establishments to access financial products and services and, additionally, to incorporate them in the official financial system to ensure they receive fair treatment.
To achieve such a goal SAMA, in cooperation with other stakeholders such as the Ministry of Finance and the Capital Markets Authority of Saudi Arabia, has been working hard since the launch of the Kingdom’s Vision 2030 reform plan to enhance financial inclusion, especially in connection with enhancing people’s and small and medium-sized enterprises’ (SMEs) access to financial services.
The FSDP is aiming to increase SME contribution to the Kingdom’s gross domestic product (GDP) from 20 percent to 35 percent, raise the funding provided by financing entities to 20 percent by 2030, and increase the number of adult bank account to 90 percent by that year.
The program also aims to raise household savings, increase the total size of financial assets, and generate more high-paying jobs in the financial sector.
Enhancing the level of inclusion will help to improve the level of financial literacy in Saudi society, an important factor for individuals to become acquainted with their financial rights and how to protect them. But more importantly it will place more pressure on financial institutions, including banks, to become more competitive in the way they offer products and services to customers in terms of quality and pricing.
SAMA attaches great importance to the enhancement of financial inclusion, in line with Vision 2030 and its 12 executive and operational programs.
In order for SAMA to enforce financial inclusion, it has set an upper limit of charges and commissions that banks are entitled to apply when providing products and services. In addition, it prevents requesting financial charges or depositing funds to open bank accounts in order to encourage individuals to open their accounts and benefit from them.
SAMA recently issued governing rules for banking agency activities, which allow banks to use qualified agents to provide services on their behalf in areas where there is no bank cover or with limited availability of banking services, with the aim of diversifying channels of access to financial services by different members of society.
SAMA has succeeded to a great extent in enhancing the level of financial inclusion in the Kingdom by introducing a wide range of banking services and digital solutions that allow individuals to access services through multiple channels, in an efficient way and round the clock, through the use of ATMs, POS, apps and the internet.
Talat Zaki Hafiz is an economist and financial analyst.